For purposes of the School Employees Retirement Act, unless the context otherwise requires:

(1) Accumulated contributions means the sum of all amounts deducted from the compensation of a member and credited to his or her individual account in the School Retirement Fund together with regular interest thereon, compounded monthly, quarterly, semiannually, or annually;

(2)(a) Actuarial equivalent means the equality in value of the aggregate amounts expected to be received under different forms of payment.

(b) For a school employee hired before July 1, 2017, the determinations shall be based on the 1994 Group Annuity Mortality Table reflecting sex-distinct factors blended using twenty-five percent of the male table and seventy-five percent of the female table. An interest rate of eight percent per annum shall be reflected in making these determinations except when a lump-sum settlement is made to an estate.

(c) For a school employee hired on or after July 1, 2017, or rehired on or after July 1, 2017, after termination of employment and being paid a retirement benefit or taking a refund of contributions, the determinations shall be based on a unisex mortality table and an interest rate specified by the board. Both the mortality table and the interest rate shall be recommended by the actuary and approved by the retirement board following an actuarial experience study, a benefit adequacy study, or a plan valuation. The mortality table, interest rate, and actuarial factors in effect on the school employee's retirement date will be used to calculate actuarial equivalency of any retirement benefit. Such interest rate may be, but is not required to be, equal to the assumed rate.

(d) If the lump-sum settlement is made to an estate, the interest rate will be determined by the AAA-rated segment of the Bloomberg Barclays Long U.S. Corporate Bond Index as of the prior June 30, rounded to the next lower quarter percent. If the AAA-rated segment of the Bloomberg Barclays Long U.S. Corporate Bond Index is discontinued or replaced, a substitute index shall be selected by the board which shall be a reasonably representative index;

(3) Beneficiary means any person in receipt of a school retirement allowance or other benefit provided by the act;

(4)(a) Compensation means gross wages or salaries payable to the member for personal services performed during the plan year and includes (i) overtime pay, (ii) member retirement contributions, (iii) retroactive salary payments paid pursuant to court order, arbitration, or litigation and grievance settlements, and (iv) amounts contributed by the member to plans under sections 125, 403(b), and 457 of the Internal Revenue Code as defined in section 49-801.01 or any other section of the code which defers or excludes such amounts from income.

(c) Compensation in excess of the limitations set forth in section 401(a)(17) of the Internal Revenue Code as defined in section 49-801.01 shall be disregarded. For an employee who was a member of the retirement system before the first plan year beginning after December 31, 1995, the limitation on compensation shall not be less than the amount which was allowed to be taken into account under the retirement system as in effect on July 1, 1993;

(5) County school official means (a) until July 1, 2000, the county superintendent or district superintendent and any person serving in his or her office who is required by law to have a teacher's certificate and (b) on or after July 1, 2000, the county superintendent, county school administrator, or district superintendent and any person serving in his or her office who is required by law to have a teacher's certificate;

(6)(a) Creditable service means prior service for which credit is granted under sections 79-926 to 79-929, service credit purchased under sections 79-933.03 to 79-933.06 and 79-933.08, and all service rendered while a contributing member of the retirement system;

(b) For employees hired prior to July 1, 2018, creditable service includes working days, sick days, vacation days, holidays, and any other leave days for which the employee is paid regular wages as part of the employee's agreement with the employer. Creditable service does not include lump-sum payments to the employee upon termination or retirement in lieu of accrued benefits for such days, eligibility and vesting credit, service years for which member contributions are withdrawn and not repaid by the member, service rendered for which the retirement board determines that the member was paid less in compensation than the minimum wage as provided in the Wage and Hour Act, or service which the board determines was rendered with the intent to defraud the retirement system;

(c) For employees hired on or after July 1, 2018, creditable service includes working days, used accrued sick days, used accrued vacation days, federal and state holidays, and jury duty leave for which the member is paid full compensation by the employer. Creditable service does not include lump-sum payments to the employee upon termination or retirement in lieu of accrued benefits for such days, eligibility and vesting credit, service years for which member contributions are withdrawn and not repaid by the member, service rendered for which the retirement board determines that the member was paid less in compensation than the minimum wage as provided in the Wage and Hour Act, service which the board determines was rendered with the intent to defraud the retirement system, or any other type of leave not expressly included in this subdivision; and

(d) Creditable service does not include service provided to an employer in the retirement system provided under the Class V School Employees Retirement Act;

(7) Current benefit means the initial benefit increased by all adjustments made pursuant to the School Employees Retirement Act;

(8) Disability means an inability to engage in any substantially gainful activity by reason of any medically determinable physical or mental impairment which was initially diagnosed or became disabling while the member was an active participant in the plan and which can be expected to result in death or be of a long-continued and indefinite duration;

(9) Disability retirement allowance means the annuity paid to a person upon retirement for disability under section 79-952;

(10) Disability retirement date means the first day of the month following the date upon which a member's request for disability retirement is received on a retirement application provided by the retirement system if the member has terminated employment in the school system and has complied with sections 79-951 to 79-954 as such sections refer to disability retirement;

(11) Early retirement inducement means, but is not limited to:

(a) A benefit, bonus, or payment to a member in exchange for an agreement by the member to terminate from employment;

(b) A benefit, bonus, or payment paid to a member in addition to the member's retirement benefit;

(d) An additional salary or wage component of any kind that is being paid as an incentive to leave employment and not for personal services performed for which creditable service is granted;

(e) Partial or full employer payment of a member's health, dental, life, or long-term disability insurance benefits or cash in lieu of such insurance benefits that extend beyond the member’s termination of employment and contract of employment dates. This subdivision does not apply to any period during which the member is contributing to the retirement system and being awarded creditable service; and

(f) Any other form of separation payments made by an employer to a member at termination, including, but not limited to, purchasing retirement annuity contracts for the member pursuant to section 79-514, depositing money for the member in an account established under section 403(b) of the Internal Revenue Code except for payments for accrued unused leave, or purchasing service credit for the member pursuant to section 79-933.08;

(12) Eligibility and vesting credit means credit for years, or a fraction of a year, of participation in a Nebraska government plan for purposes of determining eligibility for benefits under the School Employees Retirement Act. Such credit shall not be included as years of creditable service in the benefit calculation;

(13) Emeritus member means a person (a) who has entered retirement under the provisions of the act, including those persons who have retired since July 1, 1945, under any other regularly established retirement or pension system as contemplated by section 79-916, (b) who has thereafter been reemployed in any capacity by a public school, a Class V school district, or a school under the control and management of the Board of Trustees of the Nebraska State Colleges, the Board of Regents of the University of Nebraska, or a community college board of governors or has become a state school official or county school official subsequent to such retirement, and (c) who has applied to the board for emeritus membership in the retirement system. The school district or agency shall certify to the retirement board on forms prescribed by the retirement board that the annuitant was reemployed, rendered a service, and was paid by the district or agency for such services;

(14) Employer means the State of Nebraska or any subdivision thereof or agency of the state or subdivision authorized by law to hire school employees or to pay their compensation;

(15)(a) Final average compensation means:

(i) Except as provided in subdivision (ii) of this subdivision:

(A) The sum of the member's total compensation during the three twelve-month periods of service as a school employee in which such compensation was the greatest divided by thirty-six; or

(B) If a member has such compensation for less than thirty-six months, the sum of the member's total compensation in all months divided by the total number of months of his or her creditable service therefor; and

(ii) For an employee who became a member on or after July 1, 2013:

(A) The sum of the member's total compensation during the five twelve-month periods of service as a school employee in which such compensation was the greatest divided by sixty; or

(B) If a member has such compensation for less than sixty months, the sum of the member's total compensation in all months divided by the total number of months of his or her creditable service therefor.

(b) Payments under the Retirement Incentive Plan pursuant to section 79-855 and Staff Development Assistance pursuant to section 79-856 shall not be included in the determination of final average compensation;

(16) Fiscal year means any year beginning July 1 and ending June 30 next following;

(17) Hire date or date of hire means the first day of compensated service subject to retirement contributions;

(18) Initial benefit means the retirement benefit calculated at the time of retirement;

(19) Member means any person who has an account in the School Retirement Fund;

(20) Participation means qualifying for and making required deposits to the retirement system during the course of a plan year;

(21) Plan year means the twelve-month period beginning on July 1 and ending on June 30 of the following year;

(22) Prior service means service rendered as a school employee in the public schools of the State of Nebraska prior to July 1, 1945;

(23) Public school means any and all schools offering instruction in elementary or high school grades, as defined in section 79-101, which schools are supported by public funds and are wholly under the control and management of the State of Nebraska or any subdivision thereof, including (a) schools or other entities established, maintained, and controlled by the school boards of local school districts, except Class V school districts, (b) any educational service unit, and (c) any other educational institution wholly supported by public funds, except schools under the control and management of the Board of Trustees of the Nebraska State Colleges, the Board of Regents of the University of Nebraska, or the community college boards of governors for any community college areas;

(24) Regular employee means an employee hired by a public school or under contract in a regular full-time or part-time position who works a full-time or part-time schedule on an ongoing basis for twenty or more hours per week. An employee hired as described in this subdivision to provide service for less than twenty hours per week but who provides service for an average of twenty hours or more per week in each calendar month of any three calendar months of a plan year shall, beginning with the next full payroll period, commence contributions and shall be deemed a regular employee for all future employment with the same employer;

(25) Regular interest means interest fixed at a rate equal to the daily treasury yield curve for one-year treasury securities, as published by the Secretary of the Treasury of the United States, that applies on July 1 of each year, which may be credited monthly, quarterly, semiannually, or annually as the board may direct;

(26) Relinquished creditable service means, with respect to a member who has withdrawn his or her accumulated contributions under section 79-955, the total amount of creditable service which such member has given up as a result of his or her election not to remain a member of the retirement system;

(27) Required deposit means the deduction from a member's compensation as provided for in section 79-958 which shall be deposited in the School Retirement Fund;

(28) Retirement means qualifying for and accepting a school or disability retirement allowance granted under the School Employees Retirement Act;

(29) Retirement application means the form approved and provided by the retirement system for acceptance of a member's request for either regular or disability retirement;

(31) Retirement date means (a) if the member has terminated employment, the first day of the month following the date upon which a member's request for retirement is received on a retirement application provided by the retirement system or (b) if the member has filed a retirement application but has not yet terminated employment, the first day of the month following the date on which the member terminates employment. An application may be filed no more than one hundred twenty days prior to the effective date of the member's initial benefit;

(32) Retirement system means the School Employees Retirement System of the State of Nebraska;

(33) Savings annuity means payments for life, made in equal monthly payments, derived from the accumulated contributions of a member;

(34) School employee means a contributing member who earns service credit pursuant to section 79-927. For purposes of this section, contributing member means the following persons who receive compensation from a public school: (a) Regular employees; (b) regular employees having retired pursuant to the School Employees Retirement Act who subsequently provide compensated service on a regular basis in any capacity; and (c) regular employees hired by a public school on an ongoing basis to assume the duties of other regular employees who are temporarily absent. Substitute employees, temporary employees, and employees who have not attained the age of eighteen years shall not be considered school employees;

(35) School year means one fiscal year which includes not less than one thousand instructional hours or, in the case of service in the State of Nebraska prior to July 1, 1945, not less than seventy-five percent of the then legal school year;

(36) School retirement allowance means the total of the savings annuity and the service annuity or formula annuity paid a person who has retired under sections 79-931 to 79-935. The monthly payments shall be payable at the end of each calendar month during the life of a retired member. The first payment shall include all amounts accrued since the effective date of the award of annuity. The last payment shall be at the end of the calendar month in which such member dies or in accordance with the payment option chosen by the member;

(37) Service means employment as a school employee and shall not be deemed interrupted by (a) termination at the end of the school year of the contract of employment of an employee in a public school if the employee enters into a contract of employment in any public school, except a school in a Class V school district, for the following school year, (b) temporary or seasonal suspension of service that does not terminate the employee's employment, (c) leave of absence authorized by the employer for a period not exceeding twelve months, (d) leave of absence because of disability, or (e) military service when properly authorized by the retirement board. Service does not include any period of disability for which disability retirement benefits are received under sections 79-951 to 79-953;

(38) Service annuity means payments for life, made in equal monthly installments, derived from appropriations made by the State of Nebraska to the retirement system;

(39) State deposit means the deposit by the state in the retirement system on behalf of any member;

(40) State school official means the Commissioner of Education and his or her professional staff who are required by law or by the State Department of Education to hold a certificate as such term is defined in section 79-807;

(41) Substitute employee means a person hired by a public school as a temporary employee to assume the duties of regular employees due to a temporary absence of any regular employees. Substitute employee does not mean a person hired as a regular employee on an ongoing basis to assume the duties of other regular employees who are temporarily absent;

(42) Surviving spouse means (a) the spouse married to the member on the date of the member's death or (b) the spouse or former spouse of the member if survivorship rights are provided under a qualified domestic relations order filed with the board pursuant to the Spousal Pension Rights Act. The spouse or former spouse shall supersede the spouse married to the member on the date of the member's death as provided under a qualified domestic relations order. If the benefits payable to the spouse or former spouse under a qualified domestic relations order are less than the value of benefits entitled to the surviving spouse, the spouse married to the member on the date of the member's death shall be the surviving spouse for the balance of the benefits;

(43) Temporary employee means an employee hired by a public school who is not a regular employee and who is hired to provide service for a limited period of time to accomplish a specific purpose or task. When such specific purpose or task is complete, the employment of such temporary employee shall terminate and in no case shall the temporary employment period exceed one year in duration;

(44) Termination of employment occurs on the date on which the member experiences a bona fide separation from service of employment with the member's employer, the date of which separation is determined by the end of the member's contractual agreement or, if there is no contract or only partial fulfillment of a contract, by the employer.

A member shall not be deemed to have terminated employment if the member subsequently provides service to any employer participating in the retirement system provided for in the School Employees Retirement Act within one hundred eighty days after ceasing employment unless such service:

(a) Is bona fide unpaid voluntary service or substitute service, provided on an intermittent basis; or

(b) Is as provided in subsection (2) of section 79-920.

Nothing in this subdivision precludes an employer from adopting a policy which limits or denies employees who have terminated employment from providing voluntary or substitute service within one hundred eighty days after termination.

A member shall not be deemed to have terminated employment if the board determines that a claimed termination was not a bona fide separation from service with the employer or that a member was compensated for a full contractual period when the member terminated prior to the end date of the contract; and

(45) Voluntary service or volunteer means providing bona fide unpaid service to any employer.

Annotations

Disability as defined in subsection (37) of this section has two components: (1) The individual must have a physical or mental impairment of the nature described, and (2) by reason of the impairment, the individual must be unable to engage in a substantially gainful activity. Shepherd v. Chambers, 281 Neb. 57, 794 N.W.2d 678 (2011).

A school retirement system is hereby established for the
purpose of providing retirement allowances or other benefits for the school
employees of the State of Nebraska as provided in the School Employees Retirement
Act. It shall have the powers and privileges of a corporation, insofar as
may be necessary to carry out the act, shall be known as the School Employees Retirement System
of the State of Nebraska, and by such name shall transact all business as
provided in the act.

The general administration of the retirement system, except the investment of funds, is hereby vested in the retirement board. The board may, by a majority vote of its members, adopt bylaws and adopt and promulgate rules and regulations, from time to time, to carry out the School Employees Retirement Act. The board shall perform such other duties as may be required to execute the act.

(1)(a) If the board determines that the retirement system has previously received contributions or distributed benefits which for any reason are not in accordance with the statutory provisions of the School Employees Retirement Act, the board may refund contributions, require additional contributions, adjust benefits, or require repayment of benefits paid. In the event of an overpayment of a benefit, the board may, in addition to other remedies, offset future benefit payments by the amount of the prior overpayment, together with regular interest thereon. In the event of a material underpayment of a benefit, the board shall immediately make payment equal to the deficit amount plus regular interest.

(b) The board shall have the power, through the director of the Nebraska Public Employees Retirement Systems or the director's designee, to make a thorough investigation of any overpayment of a benefit, when in the judgment of the retirement system such investigation is necessary, including, but not limited to, circumstances in which benefit payments are made after the death of a member or beneficiary and the retirement system is not made aware of such member's or beneficiary's death. In connection with any such investigation, the board, through the director or the director's designee, shall have the power to compel the attendance of witnesses and the production of books, papers, records, and documents, whether in hardcopy, electronic form, or otherwise, and issue subpoenas for such purposes. Such subpoenas shall be served in the same manner and have the same effect as subpoenas from district courts.

(2) If the board determines that termination of employment has not occurred and a retirement benefit has been paid to a member of the retirement system pursuant to section 79-933, such member shall repay the benefit to the retirement system.

(3) The board may adopt and promulgate rules and regulations implementing this section, which shall include, but not be limited to, the following: (a) The procedures for refunding contributions, adjusting future contributions or benefit payments, and requiring additional contributions or repayment of benefits; (b) the process for a member, member's beneficiary, employee, or employer to dispute an adjustment of contributions or benefits; and (c) notice provided to all affected persons. All notices shall be sent at the time of or prior to an adjustment and shall describe the process for disputing an adjustment of contributions or benefits.

(4) The board shall not refund contributions made on compensation in excess of the limitations imposed by subdivision (4) of section 79-902 or subsection (9) of section 79-934.

(1) The director in charge of the retirement
system shall keep a complete record of all members with respect to name, current
address, age, contributions, and any other facts as may be necessary in the
administration of the School Employees Retirement Act. The information in
the records shall be provided by the employer in an accurate and verifiable
form, as specified by the director. The director shall, from time to time,
carry out testing procedures pursuant to section 84-1512 to verify the accuracy
of such information. For the purpose of obtaining such facts and information,
the director shall have access to the records of the various employers and
state departments and agencies and the holder of the records shall comply
with a request by the director for access by providing such facts and information
to the director in a timely manner. A certified copy of a birth certificate
or delayed birth certificate shall be prima facie evidence of the age of the
person named in the certificate.

(2) The director shall develop
and implement an employer education program using principles generally accepted
by public employee retirement systems so that all employers have the knowledge
and information necessary to prepare and file reports as the board requires.

(1)(a) On or before October 1, 2001, and at least every two years thereafter, the retirement board shall send to each contributing member of the retirement system by first-class mail, a statement of creditable service, reported salary, and other such information as is determined by the director of the Nebraska Public Employees Retirement Systems to be necessary in calculating the member's retirement benefit.

(b) If the member requests a modification or correction of his or her statement of information, the member shall provide documentation to the board supporting such modification or correction and provide clear and convincing evidence that the statement is in error. The board shall, within sixty days after receipt of the documentation supporting the modification or correction, determine whether the member has proven by clear and convincing evidence that the statement shall be modified or corrected. If the board determines that the member has provided clear and convincing evidence, the board shall modify or correct the statement. If the board determines that the member has not provided clear and convincing evidence, the board shall deny the modification or correction. In either case, the board shall notify the member. The member may appeal the decision of the board pursuant to section 79-950.

(c) The board has an ongoing fiduciary duty to modify or correct a member's statement if the board discovers an error in the information it has on record. A modification or correction shall be made within sixty days after the error is brought to the attention of the board.

(2) The board may adopt and promulgate rules and regulations and prescribe the necessary forms to carry out this section.

The State Treasurer shall be the custodian of the funds and securities of the retirement system and may deposit the funds and securities in any financial institution approved by the Nebraska Investment Council. All disbursements therefrom shall be paid by him or her only upon vouchers signed by a person authorized by the retirement board. The State Treasurer shall transmit monthly to the board a detailed statement showing all credits to and disbursements from the funds in his or her custody belonging to the retirement system.

The Auditor of Public Accounts shall make
an annual audit of the retirement system and submit electronically an annual report to the
Clerk of the Legislature of its condition. Each member of the Legislature
shall receive an electronic copy of such
report by making a request for it to the Auditor of Public Accounts. Expenses
of the audit shall be paid from the Expense Fund.

(1) The membership of the retirement system shall be composed of (a) all persons who have an account in the School Retirement Fund, (b) all school employees who on or after July 1, 2002, must participate in the retirement system pursuant to section 79-910.01 and who have begun participation in the retirement system, and (c) emeritus members. The membership of the retirement system does not include persons described in sections 79-915 and 79-919 who are specifically excluded from membership in the retirement system.

(2) The membership of the retirement system also includes any person who prior to July 1, 2002, qualified for membership as follows: (a) All persons who become school employees after September 1, 1945, except those specifically excluded under sections 79-916 and 79-919, shall become members as soon as they become senior school employees, as senior school employee was defined in section 79-902 prior to July 1, 2002; (b) senior school employees on July 1, 1945, except those specifically excluded in sections 79-916 and 79-919, shall be members of the retirement system as of July 1, 1945, unless prior to October 1, 1945, any such employee shall have filed with the retirement board and with his or her employer a notice of his or her election not to be included in the membership of the system and a duly executed waiver of all the present and prospective benefits which would otherwise inure to him or her on account of his or her membership in the retirement system; and (c) emeritus members.

(3) Any school employee who qualifies for membership in the retirement system pursuant to subsection (1) or (2) of this section may not be disqualified from membership in the retirement system solely because such employee also maintains separate employment which qualifies the employee for membership in another public retirement system, nor may membership in this retirement system disqualify such an employee from membership in another public retirement system solely by reason of separate employment which qualifies such employee for membership in this retirement system.

(1) Each person employed by a
public school who is a school employee and
who is qualified to participate in the retirement system shall
participate in the retirement system.

(2) Public schools shall ensure that all school employees
who qualify for participation pursuant to this section shall begin annual
participation on July 1 of each plan year or upon such person's date of hire,
if later than July 1, and that all required deposits are made on behalf of
such employees.

Source:Laws 2002, LB 407, § 26; Laws 2010, LB950, § 12.

79-911.
Retirement system; emeritus member; retirement, when.

Any emeritus member may retire upon his or her application to the retirement board, to be effective upon the termination of his or her employment in any public school or in any position covered by the retirement system.

All school employees not required to hold a certificate, diploma, or credentials to practice in a professional capacity who had previously elected not to be included in the retirement system pursuant to section 79-910 may, after January 1, 1978, and prior to July 1, 1978, file with the retirement board an election to be included in the membership of the retirement system, but such employees shall be treated as new employees and no service credit shall be granted for the years the employees elected out of the retirement system.

All school employees not required to hold a certificate, diploma, or credentials to practice in a professional capacity who are employed after January 1, 1978, and prior to July 1, 1978, shall have until June 30, 1978, to file with the retirement board an election not to be included in the membership of the retirement system established pursuant to the School Employees Retirement Act. The election shall be in writing on forms prescribed by the retirement board, and any person so electing waives all rights within the system except to a refund of his or her accumulated contributions. All such employees employed on or after July 1, 1978, shall become members of such retirement system as soon as they are employed and shall not have a right to elect out of such retirement system.

(1) Persons residing outside of the United States and engaged temporarily as school employees in the State of Nebraska shall not become members of the retirement system.

(2) On and after July 1, 2010, no school employee shall be authorized to participate in the retirement system provided for in the School Employees Retirement Act unless the employee (a) is a United States citizen or (b) is a qualified alien under the federal Immigration and Nationality Act, 8 U.S.C. 1101 et seq., as such act existed on January 1, 2009, and is lawfully present in the United States.

(3)(a) The board may determine that a governmental entity currently participating in the retirement system no longer qualifies, in whole or in part, under section 414(d) of the Internal Revenue Code as a participating employer in a governmental plan.

(b)(i) To aid governmental entities in their business decisionmaking process, any governmental entity currently participating in the retirement system contemplating a business transaction that may result in such entity no longer qualifying, in whole or in part, under section 414(d) of the Internal Revenue Code may notify the board in writing as soon as reasonably practicable, but no later than one hundred eighty days before the transaction is to occur.

(ii) The board when timely notified shall, as soon as is reasonably practicable, obtain from its contracted actuary the cost of any actuarial study necessary to determine the potential funding obligation. The board will notify the entity of such cost.

(iii) If such entity pays the board's contracted actuary pursuant to subdivision (3)(c)(vi) of this section for any actuarial study necessary to determine the potential funding obligation, the board shall, as soon as reasonably practicable following its receipt of the actuarial study, (A) determine whether the entity's contemplated business transaction will cause the entity to no longer qualify under section 414(d) of the Internal Revenue Code, (B) determine whether the contemplated business transaction constitutes a plan termination by the entity, (C) determine the potential funding obligation, (D) determine the administrative costs that will be incurred by the board or the Nebraska Public Employees Retirement Systems in connection with the entity's removal from the retirement system, and (E) notify the entity of such determinations.

(iv) Failure to timely notify the board pursuant to subdivision (3)(b)(i) of this section may result in the entity being treated as though the board made a decision pursuant to subdivision (3)(a) of this section.

(c) If the board makes a determination pursuant to subdivision (3)(a) of this section, or if the entity engages in the contemplated business transaction reviewed under subdivision (3)(b) of this section that results in the entity no longer qualifying under section 414(d) of the Internal Revenue Code:

(i) The board shall notify the entity that it no longer qualifies under section 414(d) of the Internal Revenue Code within ten business days after the determination;

(ii) The affected plan members shall be immediately considered fully vested;

(iii) The affected plan members shall become inactive within ninety days after the board's determination;

(iv) The entity shall pay to the School Retirement Fund an amount equal to any funding obligation;

(v) The entity shall pay to the Expense Fund an amount equal to any administrative costs incurred by the board or the Nebraska Public Employees Retirement Systems in connection with the entity's removal from the retirement system; and

(vi) The entity shall pay directly to the board's contracted actuary an amount equal to the cost of any actuarial study necessary to aid the board in determining the amount of such funding obligation, if not previously paid.

(d) For purposes of this subsection:

(i) Business transaction means a merger; consolidation; sale of assets, equipment, or facilities; termination of a division, department, section, or subgroup of the entity; or any other business transaction that results in termination of some or all of the entity's workforce; and

(ii) Funding obligation means the financial liability of the retirement system to provide benefits for the affected plan members incurred by the retirement system due to the entity's business transaction calculated using the methodology and assumptions recommended by the board's contracted actuary and approved by the board. The methodology and assumptions used must be structured in a way that ensures the entity is financially liable for all the costs of the entity's business transaction, and the retirement system is not financially liable for any of the cost of the entity's business transaction.

(e) The board may adopt and promulgate rules and regulations to carry out this subsection including, but not limited to, the methods of notifying the board of pending business transactions, the acceptable methods of payment, and the timing of such payment.

79-916.
Retirement system; membership; member of any other system; transfer of funds; when; Service Annuity Fund; created; use; investment.

(1)(a) On July 1, 2004, the board shall transfer from the School Retirement Fund to the Service Annuity Fund an amount equal to the funded ratio of the retirement system which is equal to the market value of the retirement system assets divided by the actuarial accrued liability of the retirement system, times the actuarial accrued liability of the service annuity, as determined pursuant to section 79-966.01, of the employees who are members of the retirement system established pursuant to the Class V School Employees Retirement Act. Beginning July 1, 2013, such actuarial accrued liability shall be determined for each employee on a level percentage of salary basis. On or before July 1 of each fiscal year, the state shall deposit into the Service Annuity Fund such amounts as may be necessary to pay the normal cost and amortize the unfunded actuarial accrued liability of the service annuity, as determined pursuant to section 79-966.01, as of the end of the previous fiscal year of the employees who are members of the retirement system established pursuant to the Class V School Employees Retirement Act. Based on the fiscal year of the retirement system established pursuant to the Class V School Employees Retirement Act, the administrator of such system shall provide all membership information needed for the actuary engaged by the retirement board to determine the normal cost and the amortization payment of the unfunded actuarial accrued liability, as determined pursuant to section 79-966.01, to be paid by the state to the Service Annuity Fund each fiscal year as required by this subdivision.

(b) At the time of retirement of any employee who is a member of the retirement system established pursuant to the Class V School Employees Retirement Act and who was hired prior to July 1, 2016, the retirement board shall, upon receipt of a certification of the administrator of such retirement system of the name, identification number, date of birth, retirement date, last date of employment, type of retirement, and number of years of service credited to such eligible employee at the date of retirement, transfer to such retirement system from the Service Annuity Fund the actuarial accrued liability of the service annuity to be paid by the state to the eligible employee for the years of service thus certified as provided for members of the School Employees Retirement System of the State of Nebraska under sections 79-933 and 79-952. Such transfer of the actuarial accrued liability to the retirement system established pursuant to the Class V School Employees Retirement Act shall be in lieu of the payment of the service annuity to which the employee would be entitled.

(c) The Service Annuity Fund is created. The fund shall consist of the amounts paid by the state and transferred from the School Retirement Fund pursuant to this section to pay the service annuity to be paid by the state to employees who are members of the retirement system established pursuant to the Class V School Employees Retirement Act. Any money in the Service Annuity Fund available for investment shall be invested by the state investment officer pursuant to the Nebraska Capital Expansion Act and the Nebraska State Funds Investment Act.

(2) In addition to the transfer of the actuarial accrued liability of the service annuity to be paid by the state, the state shall also transfer to the funds of the Class V school district's retirement system an amount determined by multiplying the compensation of all members of such retirement system by the percent specified in subsection (2) of section 79-966 for determining the amount of the state's payment to the School Retirement Fund plus the amount determined under subdivision (1)(b) of section 79-966. The transfer shall be made annually on or before July 1 of each fiscal year.

Cross References

79-917.
New employee;
participation in another governmental plan; how treated.

Within the first one hundred eighty days of
employment, a school employee may apply to the board for eligibility and vesting
credit for years of participation in another Nebraska governmental plan, as
defined by section 414(d) of the Internal Revenue Code. During the years of
participation in the other Nebraska governmental plan, the employee must have
been a full-time or a part-time employee as defined in the Nebraska governmental
plan in which the credit was earned. Such credit shall not be included as
years of service in the benefit calculation. The board may adopt and promulgate
rules and regulations governing the assessment and granting of eligibility
and vesting credit.

Any person who is employed by the Board of Trustees of the Nebraska State Colleges, the Board of Regents of the University of Nebraska, or a community college board of governors shall not come under the provisions of the School Employees Retirement Act.

79-920.
State school
official; department employee; retirement system options.

(1) An individual who was, prior to July 19, 1980, a state school
official and did not become a member of the State Employees Retirement System
of the State of Nebraska pursuant to the State Employees Retirement Act may,
within sixty days after September 1, 1986, elect to become a member of such
system. An individual so electing shall pay the contributions required by
such system when the service and minimum age requirements have been met.

(2)(a) An individual (i) who is or was previously a school
employee or who was employed in an out-of-state or a Class V school district,
(ii) who becomes employed by the State Department of Education after July
1, 1989, and (iii) who is a state school official may file with the retirement
board within thirty days after employment an election to become or remain
a member of the School Employees Retirement
System of the State of Nebraska. Employees electing not to participate in
the School Employees Retirement
System shall participate in the State Employees Retirement System of the State
of Nebraska.

(b) An individual shall be required to participate in the
State Employees Retirement System if (i) the individual terminated employment
from a public school participating in the School Employees Retirement System and retired pursuant
to the School Employees Retirement Act and (ii) the employment by the State
Department of Education began or will begin within one hundred eighty days
after terminating employment from the school.

(3) An employee electing not to be covered by the School Employees Retirement System
of the State of Nebraska under this section shall not be subject to section
79-957 but shall be allowed to retain his or her accumulated contribution
in the system and continue to become vested in the state's accumulated contribution
as well as the State Employees Retirement System of the State of Nebraska
according to the following:

(a) The years of participation in the School Employees Retirement System of the State of
Nebraska before an election is made plus the years of participation in the
State Employees Retirement System of the State of Nebraska after the election
is made shall both be credited toward compliance with the service requirements
provided under section 79-931; and

(b) The years of participation in the School Employees Retirement System of the State of
Nebraska before the election is made plus the years of participation in the
State Employees Retirement System of the State of Nebraska after the election
is made shall both be credited toward compliance with section 84-1321.

(1) The membership of any person in the retirement system shall cease only if he or she (a) withdraws his or her accumulated contributions under section 79-955, (b) retires on a school or formula or disability retirement allowance, or (c) dies.

(2)(a) The employer shall (i) notify the board in writing of the date upon which a termination of employment has occurred and provide the board with such information as the board deems necessary, (ii) notify the board in writing whether or not a member accepted and received an early retirement inducement, and (iii) submit in writing with the notice of termination of employment and notice of receipt of an early retirement inducement a completed certification by the employer and member under penalty of prosecution pursuant to section 79-949 that, prior to the member's termination, there was no prearranged written or verbal agreement for the member to return to service in any capacity with the same employer.

(b) The member shall submit certification to the board on a form prescribed by the board, under penalty of prosecution pursuant to section 79-949, whether or not the member accepted and received an early retirement inducement from his or her employer.

(c) The board may adopt and promulgate rules and regulations and prescribe forms as the board determines appropriate in order to carry out this subsection and to ensure full disclosure and reporting by the employer and member in order to minimize fraud and abuse and prevent the filing of false or fraudulent claim or benefit applications.

(3)(a) A former member of the retirement system who has withdrawn his or her accumulated contributions under section 79-955 shall be reinstated to membership in the retirement system if such person again becomes a school employee.

(b) The date of such membership shall relate back to the beginning of his or her original membership in the retirement system only if such school employee has repaid all amounts required in accordance with subsection (4) of this section. Unless and until all such amounts are repaid, the school employee shall be considered a new member, effective as of the date he or she again becomes a school employee.

(4)(a) With respect to any person who is reinstated to membership in the retirement system pursuant to subdivision (3)(a) of this section prior to April 17, 2014, and who files a valid and complete one-time application with the retirement board for the restoration of part or all of his or her relinquished creditable service prior to six years after April 17, 2014, but prior to termination, the following shall apply:

(i) Such member shall pay to the retirement system an amount equal to the previously withdrawn contributions for the creditable service to be restored, plus an amount equal to the actuarial assumed rate of return on such amount to the date of repayment; and

(ii) Payment for restoration of such relinquished creditable service must be completed within six years of April 17, 2014, or prior to termination, whichever is earlier.

(b) With respect to any person who is reinstated to membership in the retirement system pursuant to subdivision (3)(a) of this section on and after April 17, 2014, and who files a valid and complete one-time application with the retirement board for the restoration of part or all of his or her relinquished creditable service within five years after the date of such member's reinstatement to membership in the retirement system but prior to termination, the following shall apply:

(i) Such member shall pay to the retirement system an amount equal to the previously withdrawn contributions for the creditable service to be restored, plus an amount equal to the actuarial assumed rate of return on such amount to the date of repayment; and

(ii) Payment for restoration of such relinquished creditable service must be completed within five years of the date of such member's reinstatement to membership in the retirement system or prior to termination, whichever is earlier.

(5) If less than full payment is made by the member, relinquished creditable service shall be restored in proportion to the amounts repaid. Repayment may be made through direct payment, installment payments, an irrevocable payroll deduction authorization, cash rollover contributions pursuant to section 79-933.02, or trustee-to-trustee transfers pursuant to section 79-933.09.

(1) Commencing on September 13, 1997, a beneficiary retired under the School Employees Retirement Act who returns to employment as a school employee, except for members retired under sections 79-951 to 79-954, shall continue receiving retirement benefits and shall be treated for all purposes of the act as a new school employee. A new member account shall be created for such school employee, and the member shall make contributions to such new account and shall receive service credit only for future service commencing from the date of reemployment.

(2) A person receiving a retirement benefit may accept employment in a postsecondary school under the control and management of the Board of Trustees of the Nebraska State Colleges, the Board of Regents of the University of Nebraska, a community college board of governors for any community college area established by section 85-1504, or any other state agency without having to waive retirement payments, without having to notify the retirement board, and without being subject to any withholding of future retirement payments relating to any retirement system which is provided for a public school.

The retirement board may adopt and promulgate rules and regulations to allow for lump-sum or installment payments for school employees who elect to repurchase relinquished creditable service under section 79-921 or buy credit for prior years of service under sections 79-933.03 to 79-933.06 and 79-933.08. Any person who elects to repurchase relinquished creditable service or buy credit for prior years of service on an installment basis may be charged reasonable service costs, shall be credited with those prior years of service only as the money is actually received by the retirement system, and shall have paid to the retirement system all installments prior to the commencement of a retirement annuity.

Any person who is now a school employee or becomes a school employee and who had elected out of the retirement system between July 1, 1945, and October 1, 1945, and subsequently elected into the retirement system may elect to repay the retirement system for any number of years of service for which he or she would have contributed had he or she not elected out of the retirement system. The amount to be repaid shall not exceed the amount of the contributions which would have been paid into the retirement system based on the compensation and years of service as a school employee as verified by school officials plus the interest which would have accrued on the amount under the retirement system. This section shall not apply to school employees who retire prior to January 1, 1987.

(1) Under such rules and regulations as the retirement board may adopt and promulgate, each person who was a school employee at any time prior to the establishment of the retirement system and who becomes a member of the retirement system shall, within two years after becoming a member, file a detailed statement of all service as a school employee rendered by him or her prior to the date of establishment of the retirement system. In order to qualify for prior service credit toward a service annuity, a school employee, unless temporarily out of service for further professional education, for service in the armed forces, or for temporary disability, must have completed four years of service on a part-time or full-time basis during the five calendar years immediately preceding July 1, 1945, or have completed eighteen years out of the last twenty-five years prior to July 1, 1945, full time or part time, and two years out of the five years immediately preceding July 1, 1945, full time or part time, or such school employee must complete, unless temporarily out of service for further professional education, for service in the armed forces, or for temporary disability, four years of service within the five calendar years immediately following July 1, 1945. In order to qualify for prior service credit toward a service annuity, a school employee who becomes a member of the retirement system on or before September 30, 1951, or from July 1, 1945, to the date of becoming a member shall have been continuously employed in a public school in Nebraska operating under any other regularly established retirement or pension system.

(2)(a) Any school employee who is reemployed pursuant to 38 U.S.C. 4301 et seq., shall be treated as not having incurred a break in service by reason of his or her period of military service. Such military service shall be credited for purposes of determining the nonforfeitability of the member's accrued benefits and the accrual of benefits under the plan.

(b) The employer shall be liable for funding any obligation of the plan to provide benefits based upon such period of military service. To satisfy the liability, the employer shall pay to the retirement system an amount equal to:

(i) The sum of the member and employer contributions that would have been paid during such period of military service; and

(ii) Any actuarial costs necessary to fund the obligation of the plan to provide benefits based upon such period of military service. For the purposes of determining the amount of such liability and obligation of the plan, earnings and forfeitures, gains and losses, regular interest, or interest credits that would have accrued on the member and employer contributions that are paid by the employer pursuant to this section shall not be included.

(c) The amount required in subdivision (b) of this subsection shall be paid to the retirement system as soon as reasonably practicable following the date of reemployment, but must be paid within eighteen months of the date the board notifies the employer of the amount due. If the employer fails to pay the required amount within such eighteen-month period, then the employer is also responsible for any actuarial costs and interest on actuarial costs that accrue from eighteen months after the date the employer is notified by the board until the date the amount is paid.

(d) The retirement board may adopt and promulgate rules and regulations to carry out this subsection, including, but not limited to, rules and regulations on:

(i) How and when the member and employer must notify the retirement system of a period of military service;

(ii) The acceptable methods of payment;

(iii) Determining the service and compensation upon which the contributions must be made;

(iv) Accelerating the payment from the employer due to unforeseen circumstances that occur before payment is made pursuant to this section, including, but not limited to, the member's termination or retirement or the employer's reorganization, consolidation, merger, or closing; and

(v) The documentation required to substantiate that the member was reemployed pursuant to 38 U.S.C. 4301 et seq.

(3) This section only applies to military service that falls within the definition of uniformed service under 38 U.S.C. 4301 et seq. Military service does not include service provided pursuant to sections 55-101 to 55-181.

(1) The board shall grant service credit pursuant to this section on an annual basis to members who participate during each fiscal year.

(2) For a member who is subject to the wage and hour provisions of the federal Fair Labor Standards Act of 1938, 29 U.S.C. 201 et seq., as such sections existed on January 1, 2002, service credit shall be calculated as follows:

(a) For each year during which a member provides compensated service to one or more school districts for one thousand or more hours, the member shall be credited one year of service credit; and

(b) For each year during which a member provides less than one thousand hours of compensated service to one or more school districts, the member shall be credited one one-thousandth of a year's service credit for each hour worked.

(3) For a member who is exempt from the wage and hour provisions of the federal Fair Labor Standards Act of 1938, 29 U.S.C. 201 et seq., as such sections existed on January 1, 2002, service credit shall be calculated as follows:

(a) Full-time service rendered for the regular school year in one or more public schools shall be equivalent to one year's service;

(b) Part-time service in one or more public schools shall be credited as individual years of fractional employment in proportion to the ratio the part-time service bears to the amount of time considered to be full-time service for the plan year; and

(c) If a member is employed for less than the full plan year, the member shall be granted a fractional year of service credit calculated pursuant to subdivision (a) or (b) of this subsection for only that portion of the plan year the member was employed.

(4) The board may adopt and promulgate rules and regulations for the granting of service credit in accordance with this section, but in no case shall more than one year of service be granted for all service in one plan year.

Subject to the restrictions in the School Employees Retirement Act and to such rules and regulations as the retirement board may adopt, the retirement board shall verify, as soon as practicable after the filing of statements of service, the service claimed in the statements.

Upon verification of the statements of service, the retirement board shall issue prior service certificates stating, for each member with a valid claim, the length of service in this state, rendered prior to the day of the establishment of the retirement system, with which the member is credited on the basis of his or her proof of service. Any member may, within one year from the date of issuance or modification of such certificate, request the retirement board to modify or correct his or her prior service certificate.

(1) A member hired prior to July 1, 2016, upon filing a retirement application with the retirement system, may retire (a) at any age if the member has completed thirty-five years of creditable service, (b) if the member has completed at least five years of creditable service plus eligibility and vesting credit and is at least sixty years of age, (c) if the member is at least sixty-five years of age upon termination, or (d) if the member is at least fifty-five years of age, has acquired the equivalent of one-half year of service as a public school employee under the retirement system following July 1, 1997, was a school employee on or after March 4, 1998, and the sum of the member's attained age and creditable service totals eighty-five.

(2) A member hired on or after July 1, 2016, and prior to July 1, 2018, or a member who has taken a retirement or refund that relinquished all prior service credit and who has not repaid the full amount of the refund pursuant to section 79-921 and is rehired or hired by any employer covered by the retirement system on or after July 1, 2016, and prior to July 1, 2018, upon filing a retirement application with the retirement system, may retire (a) at any age if the member has completed thirty-five years of creditable service, (b) if the member is at least fifty-five years of age and the sum of the member's attained age and creditable service totals eighty-five, or (c) if the member is at least sixty years of age and has completed at least five years of creditable service including eligibility and vesting credit.

(3) A member hired on or after July 1, 2018, or a member or former member who has taken a retirement or refund that relinquished all prior service credit and who has not repaid the full amount of the refund pursuant to section 79-921 and is rehired or hired by any employer covered by the retirement system on or after July 1, 2018, upon filing a retirement application with the retirement system, may retire (a) if the member is at least sixty years of age and the sum of the member's attained age and creditable service totals eighty-five or (b) if the member is at least sixty years of age and has completed at least five years of creditable service including eligibility and vesting credit.

(1) Payment of any benefit provided under the retirement system may not be deferred later than April 1 of the year following the year in which the member has both attained at least age seventy and one-half years and terminated his or her employment with the school system.

(2) The board shall make reasonable efforts to locate the member or the member's beneficiary and distribute benefits by the required beginning date as specified by section 401(a)(9) of the Internal Revenue Code and the regulations issued thereunder. If the board is unable to make such a distribution, the benefit shall be distributed pursuant to the Uniform Disposition of Unclaimed Property Act and no amounts may be applied to increase the benefits any member would otherwise receive under the School Employees Retirement Act.

Cross References

Uniform Disposition of Unclaimed Property Act, see section 69-1329.

79-933.
Retirement; member; amount of allowance.

(1) Upon retirement under section 79-931, a member or emeritus member shall receive a school retirement allowance which shall consist of the sum of: (a) A savings annuity which shall be the actuarial equivalent, as determined by the retirement board, of the member's accumulated contributions at the time of his or her retirement or, in the case of an emeritus member, the savings annuity fixed by the retirement board at the time of his or her original retirement; and (b) a service annuity to be paid by the State of Nebraska.

(2) The amount of any individual service annuity for (a) a full-time school employee hired on or before April 1, 1988, who retires with thirty-five or more years of service or who retires under the provisions of disability retirement, (b) a full-time school employee who provided compensated service after April 1, 1988, but prior to July 19, 1996, if the service annuity commences on or after the member's sixty-fifth birthday, who retires with thirty-five or more years of service or who retires under the provisions of disability retirement, or (c) an emeritus member shall be three dollars and fifty cents per month for each year of creditable service commencing with his or her retirement on or after May 19, 1981. For employees not enumerated in subdivision (a) or (b) of this subsection or for employees hired on or after July 19, 1996, if the service annuity commences prior to the member's sixty-fifth birthday, it shall be on an actuarially reduced basis. Each school employee or emeritus member who retired before July 1, 1973, and who is receiving a service annuity as of that date shall have such service annuity adjusted by the increase in the cost of living as determined by the difference between the Consumer Price Index for Urban Wage Earners and Clerical Workers from the date the service annuity commenced and July 1, 1973, except that such annuity shall not exceed three dollars and fifty cents monthly per year of service based on the same number of years of service that is currently being used to determine his or her service annuity. Such increased service annuity shall commence on July 1, 1973.

(a) Direct rollover means a payment by the retirement system to the eligible retirement plan or plans specified by the distributee;

(b) Distributee means the member, the member's surviving spouse, or the member's former spouse who is an alternate payee under a qualified domestic relations order as defined in section 414(p) of the Internal Revenue Code;

(c) Eligible retirement plan means (i) an individual retirement account described in section 408(a) of the Internal Revenue Code, (ii) an individual retirement annuity described in section 408(b) of the code, except for an endowment contract, (iii) a qualified plan described in section 401(a) of the code, (iv) an annuity plan described in section 403(a) or 403(b) of the code, (v) except for purposes of section 79-933.02, an individual retirement plan described in section 408A of the code, and (vi) a plan described in section 457(b) of the code and maintained by a governmental employer. For eligible rollover distributions to a surviving spouse, an eligible retirement plan means subdivisions (1)(c)(i) through (vi) of this section; and

(d) Eligible rollover distribution means any distribution to a distributee of all or any portion of the balance to the credit of the distributee in the plan, except such term shall not include any distribution which is one of a series of substantially equal periodic payments, not less frequently than annually, made for the life of the distributee or joint lives of the distributee and the distributee's beneficiary or for the specified period of ten years or more and shall not include any distribution to the extent such distribution is required under section 401(a)(9) of the Internal Revenue Code.

(2) For distributions made to a distributee on or after January 1, 1993, a distributee may elect to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee.

(3) A member's surviving spouse or former spouse who is an alternate payee under a qualified domestic relations order and, on or after July 1, 2010, any designated beneficiary of a member who is not a surviving spouse or former spouse who is entitled to receive an eligible rollover distribution from the retirement system may, in accordance with such rules, regulations, and limitations as may be established by the board, elect to have such distribution made in the form of a direct transfer to a retirement plan eligible to receive such transfer under the provisions of the Internal Revenue Code.

(4) An eligible rollover distribution on behalf of a designated beneficiary of a member who is not a surviving spouse or former spouse of the member may be transferred to an individual retirement account or annuity described in section 408(a) or section 408(b) of the Internal Revenue Code that is established for the purpose of receiving the distribution on behalf of the designated beneficiary and that will be treated as an inherited individual retirement account or individual retirement annuity described in section 408(d)(3)(C) of the Internal Revenue Code.

(5) The board may adopt and promulgate rules and regulations for direct rollover procedures which are consistent with section 401(a)(31) of the Internal Revenue Code and which include, but are not limited to, the form and time of direct rollover distributions.

(1) The retirement system may accept cash rollover contributions from a member who is making payment pursuant to sections 79-921, 79-933.03 to 79-933.06, and 79-933.08 if the contributions do not exceed the amount of payment required for the relinquished creditable service repurchased or service credits purchased by the member pursuant to such sections and the contributions represent (a) all or any portion of the balance of the member's interest in a qualified plan under section 401(a) of the Internal Revenue Code or (b) the interest of the member from an individual retirement account or an individual retirement annuity, the entire amount of which is attributable to a qualified total distribution, as defined in the Internal Revenue Code, from a qualified plan under section 401(a) of the code and qualified as a tax-free rollover amount. The member's interest under subdivision (a) or (b) of this subsection must be transferred to the retirement system within sixty days from the date of the distribution from the qualified plan, individual retirement account, or individual retirement annuity.

(2) Cash transferred to the retirement system as a rollover contribution shall be deposited as other payments for purchase of service credits or repurchase of relinquished creditable service pursuant to section 79-921.

(3) Under the same conditions as provided in subsection (1) of this section, the retirement system may accept eligible rollover distributions from (a) an annuity contract described in section 403(b) of the Internal Revenue Code, (b) a plan described in section 457(b) of the code which is maintained by a state, a political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state, or (c) the portion of a distribution from an individual retirement account or annuity described in section 408(a) or 408(b) of the code that is eligible to be rolled over and would otherwise be includable in gross income. Amounts accepted pursuant to this subsection shall be deposited as all other payments under this section.

(4) The retirement system may accept direct rollover distributions made from a qualified plan pursuant to section 401(a)(31) of the Internal Revenue Code. The direct rollover distribution shall be deposited as all other payments under this section.

(5) The board may adopt and promulgate rules and regulations defining procedures for acceptance of rollovers which are consistent with sections 401(a)(31) and 402 of the Internal Revenue Code.

79-933.03.
Contributing member; credit for service in other schools; limitation; procedure; payment.

(1) Under such rules and regulations as the board may adopt and promulgate, a contributing member under contract or employed on July 19, 1996, may receive credit for not to exceed ten years of creditable teaching service rendered in public schools in another state or schools in this state covered by a school retirement system established pursuant to section 79-979, if such member files an application for service credit within three years of membership or reinstatement in the School Employees Retirement System of the State of Nebraska and makes payment into the retirement system of an amount equal to the required deposits he or she would have paid had he or she been employed in this state by a school covered by the retirement system, plus the interest which would have accrued on such amount. Payment must be completed within five years of membership or reinstatement in the retirement system, or prior to termination of employment, whichever occurs first, and may be made through direct payment, installment payments, or an irrevocable payroll deduction authorization.

(2) A member who retires as a school employee of this state shall not receive credit for time in service outside of this state or in a school in this state covered by the school retirement system established pursuant to section 79-979 in excess of the time he or she has been in service as a school employee in this state of a school covered by the School Employees Retirement System of the State of Nebraska. The board shall refund to the member the payments made pursuant to subsection (1) of this section to the extent that the member does not receive credit for such service.

(3) A member who purchases service credit pursuant to this section shall provide such documentation as the board may require to prove that the member has forfeited the receipt of any benefits from the retirement system of the public school in another state or a school in this state covered by a retirement system established pursuant to section 79-979 for the creditable service rendered in such school.

(1) For contributing members under contract or employed on July 19, 1996, and under such rules and regulations as the board may adopt and promulgate, any member who was away from his or her position while on a leave of absence from such position authorized by the school board or board of education of the school district by which he or she was employed at the time of such leave of absence or pursuant to any contractual agreement entered into by such school district may receive credit for such time as he or she was on such leave of absence. Such credit shall increase the benefits provided by the retirement system and shall be included in creditable service when determining eligibility for death, disability, termination, and retirement benefits. The member who receives the credit shall earn benefits during the leave based on compensation at the level received immediately prior to the leave of absence. Such credit shall be allowed if such member has paid into the retirement system an amount equal to the sum of the deductions from his or her compensation and any contribution which the school district would have been required to make had he or she continued to receive compensation at the level received immediately prior to the leave of absence with such deposits plus interest which would have accrued on such deposits to be paid as the retirement board may direct within five years of his or her return to membership in the retirement system, or prior to termination of employment, whichever occurs first, and may be made through direct payment, installment payments, or an irrevocable payroll deduction authorization.

(2) Leave of absence shall be construed to include, but is not limited to, sabbaticals, maternity leave, exchange teaching programs, full-time leave as an elected official of a professional association or collective-bargaining unit, or leave of absence to pursue further education or study. A leave of absence granted pursuant to this section shall not exceed four years in length, and in order to receive credit for the leave of absence the member must return to employment with a school district, other than a Class V school district, in the state within one year after termination of the leave of absence and must apply for such credit within three years of the return to membership in the retirement system.

79-933.05.
Contributing
member; credit for service in other schools; limitation; procedure; payment.

(1) A contributing member may purchase service credit for
not to exceed ten years of creditable service rendered in public schools in
another state or schools in this state covered by the school retirement system
established pursuant to section 79-979. The amount to be paid by the member
for such service credit shall equal the actuarial cost to the School Employees Retirement System
of the State of Nebraska for allowing such additional service credit to the
employee. Payment shall be completed within five years after making the election
to purchase service credit or prior to termination of employment, whichever
occurs first, and may be made through direct payment, installment payments,
or an irrevocable payroll deduction authorization.

(2) A member who retires as a school employee of this state
shall not receive credit for time in service outside of this state or in a
school in this state covered by the school retirement system established pursuant
to section 79-979 in excess of the time he or she has been in service as a
school employee in this state of a school covered by the School Employees Retirement System
of the State of Nebraska. The board shall refund to the member the payments
made pursuant to this section to the extent that the member does not receive
credit for such service.

(3) Compensation for the period of service purchased shall
not be included in determining the member's final average compensation.

(4) A member who purchases service credit pursuant to this
section shall provide such documentation as the board may require to prove
that the member has forfeited the receipt of any benefits from the retirement
system of the public school in another state or a school in this state covered
by a retirement system established pursuant to section 79-979 for the creditable
service rendered in such school.

(1) Any contributing member may purchase service credit for
time he or she was on a leave of absence authorized by the school board or
board of education of the school district by which he or she was employed
at the time of such leave of absence or pursuant to any contractual agreement
entered into by such school district. Such credit shall increase the benefits
provided by the retirement system and shall be included in creditable service
when determining eligibility for death, disability, termination of employment,
and retirement benefits. The amount to be paid by the member for such service
credit shall equal the actuarial cost to the retirement system for allowing
such additional service credit to the employee. Payment shall be completed
within five years after such member's election to purchase service credit
or prior to termination of employment, whichever occurs first, and may be
made through direct payment, installment payments, or an irrevocable payroll
deduction authorization.

(2) Leave of absence shall be construed to include, but not
be limited to, sabbaticals, maternity leave, exchange teaching programs, full-time
leave as an elected official of a professional association or collective-bargaining
unit, or leave of absence to pursue further education or study. Such leave
shall not exceed four years in length, and in order to receive credit for
the leave of absence the member must return to employment with a school district,
other than a Class V school district, in the state within one year after termination
of the leave of absence.

(3) Compensation for the period of service purchased shall
not be included in determining the member's final average compensation.

79-933.07.
Purchase of service credit or repurchase of relinquished creditable service; rules and regulations.

The board may adopt and promulgate rules and regulations for the purchase of service credit or the repurchase of relinquished creditable service, which shall include, but not be limited to, the method for determining actuarial cost and interest requirements for payments other than one lump-sum payment.

79-933.08.
Purchase of service credit within twelve months of retirement; agreement authorized.

(1) A school employee who became a member before July 1, 2014, and who has completed at least five years of creditable service plus eligibility and vesting credit or a school employee who became a member for the first time on or after July 1, 2014, and who has completed ten or more years of creditable service may purchase service credit for up to five years of creditable service. Such purchase may be executed up to twelve months prior to the employee's retirement date. Such service credits shall be purchased by the employee for an amount equal to the actuarial cost to the retirement system for allowing such additional service credit to the employee.

(2) Payment for such service credits shall be completed prior to the employee's termination of employment date and may be made through direct payment, installment payments, or an irrevocable deduction authorization. If payments are made on an installment basis, interest shall be charged at the rate of regular interest.

(3) Compensation for the period of service purchased shall not be included in determining the member's final average compensation.

(4) The retirement board shall credit funds collected pursuant to this section to the Contingent Account pending the employee's retirement. If the employee does not retire within twelve months after the execution of the purchase made pursuant to this section, such funds shall be refunded, excluding interest earned, and the employee shall not be given credit for the service credit attempted to be purchased.

The
retirement system may accept as payment for repurchase
of relinquished creditable service under section 79-921 or purchases
of service credit made pursuant to the School Employees Retirement Act a
direct trustee-to-trustee transfer from (1) an eligible tax-sheltered annuity
plan as described in section 403(b) of the Internal Revenue Code or (2) an
eligible deferred compensation plan as described in section 457(b) of the
code on behalf of a member who is making payments for such relinquished creditable service or service credit. The
amount transferred shall not exceed the amount of payment required for the relinquished creditable service being
repurchased or service credit being purchased, and the
repurchase of such relinquished creditable service or the purchase
of such service credit shall qualify as a purchase of permissive service credit
by the member as defined in section 415 of the code.

(1) In lieu of the school retirement allowance provided by section 79-933, any member who is not an employee of a Class V school district and who becomes eligible to make application for and receive a school retirement allowance under section 79-931 may receive a formula annuity retirement allowance if it is greater than the school retirement allowance provided by section 79-933.

(2) Subject to the other provisions of this section, the monthly formula annuity in the normal form shall be determined by multiplying the number of years of creditable service for which such member would otherwise receive the service annuity provided by section 79-933 by (a) one and one-quarter percent of his or her final average compensation for a member who has acquired the equivalent of one-half year of service or more as a school employee under the retirement system following August 24, 1975, (b) one and one-half percent of his or her final average compensation for a member who has acquired the equivalent of one-half year of service or more as a school employee under the retirement system following July 17, 1982, (c) one and sixty-five hundredths percent of his or her final average compensation for a member who has acquired the equivalent of one-half year of service or more as a school employee under the retirement system following July 1, 1984, (d) one and seventy-three hundredths percent of his or her final average compensation for a member actively employed as a school employee under the retirement system or under contract with an employer on or after June 5, 1993, (e) one and eight-tenths percent of his or her final average compensation for a member who has acquired the equivalent of one-half year of service or more as a school employee under the retirement system following July 1, 1995, and was employed as a school employee under the retirement system or under contract with an employer on or after April 10, 1996, (f) one and nine-tenths percent of his or her final average compensation for a member who has acquired the equivalent of one-half year of service or more as a school employee under the retirement system following July 1, 1998, and was employed as a school employee under the retirement system or under contract with an employer on or after April 29, 1999, (g) two percent of his or her final average compensation for a member who has acquired the equivalent of one-half year of service or more as a school employee under the retirement system following July 1, 2000, who was employed as a school employee under the retirement system or under contract with an employer on or after May 2, 2001, and hired prior to July 1, 2016, and who has not retired prior to May 2, 2001, or (h) two percent of his or her final average compensation for a member initially hired on or after July 1, 2016, or a member who has taken a refund or retirement and is rehired or hired by a separate employer covered by the retirement system on or after July 1, 2016, and has acquired the equivalent of five years of service or more as a school employee under the retirement system or under contract with an employer on or after July 1, 2016. Subdivision (2)(f) of this section shall not apply to a member who is retired prior to April 29, 1999. Subdivision (2)(g) of this section shall not apply to a member who is retired prior to May 2, 2001.

(3) If the annuity begins on or after the member's sixty-fifth birthday, the annuity shall not be reduced.

(4) If the annuity begins prior to the member's sixtieth birthday and the member has completed thirty-five or more years of creditable service, the annuity shall be actuarially reduced on the basis of age sixty-five.

(5)(a) For a member who has acquired the equivalent of one-half year of creditable service or more as a school employee under the retirement system following July 1, 1997, and who was a school employee on or after March 4, 1998, and who was hired prior to July 1, 2016, if the annuity begins at a time when the sum of the member's attained age and creditable service totals eighty-five and the member is at least fifty-five years of age, the annuity shall not be reduced. This subdivision shall not apply to a member who is retired prior to March 4, 1998.

(b) For a member hired on or after July 1, 2016, and prior to July 1, 2018, or for a member who has taken a retirement or refund that relinquished all prior service credit and who has not repaid the full amount of the refund pursuant to section 79-921 and is rehired or hired by any employer covered by the retirement system on or after July 1, 2016, and prior to July 1, 2018, if the annuity begins at a time when the sum of the member's attained age and creditable service totals eighty-five and the member is at least fifty-five years of age, the annuity shall not be reduced.

(c) For a member hired on or after July 1, 2018, or for a member or former member who has taken a retirement or refund that relinquished all prior service credit and who has not repaid the full amount of the refund pursuant to section 79-921 and is rehired or hired by any employer covered by the retirement system on or after July 1, 2018, if the annuity begins at a time when the sum of the member's attained age and creditable service totals eighty-five and the member is at least sixty years of age, the annuity shall not be reduced.

(6) If the annuity begins on or after the member's sixtieth birthday and the member has completed at least a total of five years of creditable service including eligibility and vesting credit but has not yet qualified for an unreduced annuity as specified in this section, the annuity shall be reduced by three percent for each year after the member's sixtieth birthday and prior to his or her sixty-fifth birthday.

(7) Except as provided in section 42-1107, the normal form of the formula annuity shall be an annuity payable monthly during the remainder of the member's life with the provision that in the event of his or her death before sixty monthly payments have been made the monthly payments will be continued to his or her estate or to the beneficiary he or she has designated until sixty monthly payments have been made. Except as provided in section 42-1107, a member may elect to receive in lieu of the normal form of annuity an actuarially equivalent annuity in any optional form provided by section 79-938.

(8) All formula annuities shall be paid from the School Retirement Fund.

(9)(a)(i) For purposes of this section, in the determination of compensation for members on or after July 1, 2005, that part of a member's compensation for the plan year which exceeds the member's compensation with the same employer for the preceding plan year by more than seven percent of the compensation base during the sixty months preceding the member's retirement shall be excluded unless (A) the member experienced a substantial change in employment position, (B) as verified by the school board, the excess compensation above seven percent occurred as the result of a collective-bargaining agreement between the employer and a recognized collective-bargaining unit or category of school employee, and the percentage increase in compensation above seven percent shall not be excluded for employees outside of a collective-bargaining unit or within the same category of school employee, or (C) the excess compensation occurred as the result of a districtwide permanent benefit change made by the employer for a category of school employee in accordance with subdivision (4)(a)(iv) of section 79-902.

(ii) For purposes of subdivision (9)(a) of this section:

(A) Category of school employee means either all employees of the employer who are administrators or certificated teachers, or all employees of the employer who are not administrators or certificated teachers, or both;

(B) Compensation base means (I) for current members, employed with the same employer, the member's compensation for the plan year ending June 30, 2005, or (II) for members newly hired or hired by a separate employer on or after July 1, 2005, the member's compensation for the first full plan year following the member's date of hiring. Thereafter, the member's compensation base shall be increased each plan year by the lesser of seven percent of the member's preceding plan year's compensation base or the member's actual annual compensation increase during the preceding plan year; and

(C) Recognized collective-bargaining unit means a group of employees similarly situated with a similar community of interest appropriate for bargaining recognized as such by a school board.

(b)(i) In the determination of compensation for members whose retirement date is on or after July 1, 2012, through June 30, 2013, that part of a member's compensation for the plan year which exceeds the member's compensation with the same employer for the preceding plan year by more than nine percent of the compensation base shall be excluded.

(ii) For purposes of subdivision (9)(b) of this section, compensation base means (A) for current members employed with the same employer, the member's compensation for the plan year ending June 30, 2012, or (B) for members newly hired or hired by a separate employer on or after July 1, 2012, the member's compensation for the first full plan year following the member's date of hiring.

(c)(i) In the determination of compensation for members whose retirement date is on or after July 1, 2013, that part of a member's compensation for the plan year which exceeds the member's compensation for the preceding plan year by more than eight percent during the capping period shall be excluded. Such member's compensation for the first plan year of the capping period shall be compared to the member's compensation received for the plan year immediately preceding the capping period.

(ii) For purposes of subdivision (9)(c) of this section:

(A) Capping period means the five plan years preceding the later of (I) such member's retirement date or (II) such member's final compensation date; and

(B) Final compensation date means the later of (I) the date on which a retiring member's final compensation is actually paid or (II) if a retiring member's final compensation is paid in advance as a lump sum, the date on which such final compensation would have been paid to the member in the absence of such advance payment.

No provision of section 79-916, 79-934, 79-958, 79-960, or 79-966 which would result in an increase in benefits that would have been payable prior to July 1, 1984, shall apply to any person until that person has acquired the equivalent of one-half year of service or more as a school employee under the retirement system following July 1, 1984.

No provision of section 79-934, 79-957, 79-958, or 79-960 which would result in an increase in benefits that would have been payable prior to July 1, 1986, shall apply to any person until that person has acquired the equivalent of one-half year of service or more as a school employee under the retirement system following July 1, 1986.

No provision of section 79-934, 79-957, 79-958, or 79-960 which would result in an increase in benefits that would have been payable prior to April 1, 1988, shall apply to any person unless he or she is employed on such date and has acquired five hundred sixteen or more hours as a school employee under the retirement system during or after fiscal year 1987-88.

No provision of section 79-916, 79-934, 79-957, 79-958, 79-960, or 79-966 which would result in an increase in benefits that would have been payable prior to July 1, 2016, shall apply to any person until that person has acquired the equivalent of five years of service or more as a school employee under the retirement system following July 1, 2016.

At any time before the retirement date a member may elect to receive his or her school retirement allowance or disability retirement allowance under any optional form specified in the group annuity contract, if one exists, or under any optional form permitted by the retirement board, if no group annuity contract exists. Such optional annuity shall be the actuarial equivalent of the normal form of the annuity.

All benefits under the retirement system shall be paid as directed by the retirement board. Except as provided in section 79-916, no member shall receive a retirement benefit from the retirement system covering years for which he or she is being paid a benefit under the Class V School Employees Retirement Act.

Cross References

For purposes of
sections 79-941 to 79-946, unless the
context otherwise requires, total monthly benefit means the benefit that would
have been received under a monthly life annuity with no refund or death benefit
option even though a different option, as provided in section 79-938, has
been selected. The total monthly benefit shall be computed as if the person
had retired at age sixty-five or at the actual age of retirement, whichever
is later.

For each person
who qualifies under sections 79-941 to 79-946, the retirement
board shall determine the value of the total monthly benefit being received
from the School Employees Retirement
System of the State of Nebraska or from the retirement system for Class V
districts as provided by the Class V School Employees Retirement Act. From
one hundred fifty-five dollars, the retirement board shall subtract the total
monthly benefit. Such difference, if positive, shall be the supplemental benefit
and shall be paid to the retired person each month from the School Retirement
Fund, except that if this difference is less than five dollars, a minimum
payment of five dollars per month shall be made to such person.

If
a beneficiary is receiving the annuity provided through the School Employees Retirement System
of the State of Nebraska or through the retirement system for Class V districts
as provided by the Class V School Employees Retirement Act, the supplemental
benefit shall be the benefit that would be computed under section 79-942 had
the deceased retired person still been alive. The beneficiary will continue
to receive the supplemental benefit until the expiration of the annuity option
selected by the member.

Cross References

If a retiree eligible for the supplemental benefit under section 79-942 dies subsequent to July 19, 1980, the beneficiary shall be entitled to the supplemental benefit until the expiration of the annuity option selected by the retired member.

(1) The Retired Teachers Supplementary Benefits Fund is created. The fund shall be administered by the retirement board. This fund shall be considered an express obligation of the state. The appropriation for such fund shall be determined by the retirement board as of January 1 of each odd-numbered year and included in the biennial budget to be adopted by the regular session of the Legislature held in each odd-numbered year.

(2) On June 30, 2004, the Retired Teachers Supplementary Benefits Fund shall terminate and all assets of the fund shall be transferred to the School Retirement Fund. All obligations of the Retired Teachers Supplementary Benefits Fund shall be paid thereafter from the School Retirement Fund. The appropriation to provide supplementary benefits to retired teachers shall be determined as provided in subsection (1) of this section and shall be made to the School Retirement Fund in the same manner and amounts as had been made to the Retired Teachers Supplementary Retirement Fund.

(1) Commencing October 1, 1988, the retirement board shall
determine an adjusted supplemental retirement benefit to reflect changes in
the cost of living and wage levels that have occurred subsequent to the date
of retirement for each person who is retired from the School Employees Retirement System of the State of
Nebraska or from the retirement system for Class V school districts as provided
by the Class V School Employees Retirement Act with twenty-five or more years
of creditable service as of October 1, 1988.

(2) For each person who qualifies under subsection (1) of
this section, the retirement board shall determine the value of the total
monthly benefit being received from the School Employees Retirement System of the State of
Nebraska or from the retirement system for Class V school districts as provided
by the Class V School Employees Retirement Act and the supplemental benefit
provided by section 79-942 if applicable. From two hundred fifty dollars,
the board shall subtract the total monthly benefit. Such difference, if positive,
shall be the adjusted supplemental retirement benefit and shall be paid to
the retired person each month, except that if this difference is less than
five dollars, a minimum payment of five dollars per month shall be made to
such person. The adjusted supplemental retirement benefit shall be paid to
a retired person during his or her life.

(3) The retirement board may buy a paid-up annuity for a
retired person which guarantees the adjusted supplemental retirement benefit
provided under this section.

(4) The adjusted supplemental retirement benefit provided
under this section shall be funded from the Contingent Account but only from
such income that is attributable to employer and employee contributions.

On July 1 of each year,
for school employees who became members prior to July 1, 2013:

(1) The board shall determine the number of retired
members or beneficiaries described in subdivision (4)(b) of this section in
the retirement system and an annual benefit adjustment shall be made by the
board for each retired member or beneficiary under one of the cost-of-living
adjustment calculation methods found in subdivision (2), (3), or (4)
of this section. Each retired member or beneficiary, if eligible, shall receive
an annual benefit adjustment under the cost-of-living adjustment calculation
method that provides the retired member or beneficiary the greatest annual
benefit adjustment increase. No retired member or beneficiary shall receive
an annual benefit adjustment under more than one of the cost-of-living adjustment
calculation methods provided in this section;

(2) The current benefit paid to a retired member or beneficiary
under this subdivision shall be adjusted
so that the purchasing power of the benefit being paid is not less than seventy-five
percent of the purchasing power of the initial benefit. The purchasing power
of the initial benefit in any year following the year in which the initial
benefit commenced shall be calculated by dividing the United States Department
of Labor, Bureau of Labor Statistics, Consumer Price Index for Urban Wage
Earners and Clerical Workers factor on June 30 of the current year by the
Consumer Price Index for Urban Wage Earners and Clerical Workers factor on
June 30 of the year in which the benefit commenced. The result shall be multiplied
by the product that results when the amount of the initial benefit is multiplied
by seventy-five percent. In any year in which applying the adjustment provided
in subdivision (3) of this section
results in a benefit which would be less than seventy-five percent of the
purchasing power of the initial benefit as calculated in this subdivision, the
adjustment shall instead be equal to the percentage change in the Consumer
Price Index for Urban Wage Earners and Clerical Workers factor from the prior
year to the current year;

(3) The current benefit paid to a retired member or beneficiary
under this subdivision shall be increased
annually by the lesser of (a) the percentage change in the Consumer Price
Index for Urban Wage Earners and Clerical Workers for the period between June
30 of the prior year to June 30 of the present year or (b) two and one-half
percent;

(4)(a) The current benefit paid to a retired member or beneficiary
under subdivision (4) of this section shall
be calculated by multiplying the retired member's or beneficiary's total monthly
benefit by the lesser of (i) the cumulative change in the Consumer Price Index
for Urban Wage Earners and Clerical Workers from the last adjustment of the
total monthly benefit of each retired member or beneficiary through June 30
of the year for which the annual benefit adjustment is being calculated or
(ii) an amount equal to three percent per annum compounded for the period
from the last adjustment of the total monthly benefit of each retired member
or beneficiary through June 30 of the year for which the annual benefit adjustment
is being calculated.

(b) In order for a retired member or beneficiary to receive
the cost-of-living adjustment calculation method provided in subdivision (4) of this section, the retired
member or beneficiary shall be (i) a retired member or beneficiary who has
been receiving a retirement benefit for at least five years if the member
had at least twenty-five years of creditable service, (ii) a member who has
been receiving a disability retirement benefit for at least five years pursuant
to section 79-952, or (iii) a beneficiary who has been receiving a death benefit
pursuant to section 79-956 for at least five years, if the member's or beneficiary's
monthly accrual rate is less than or equal to the minimum accrual rate as
determined by subdivision (4) of this section.

(c) The monthly accrual rate under subdivision (4) of this section is the retired
member's or beneficiary's total monthly benefit divided by the number of years
of creditable service earned by the retired or deceased member.

(d) The total monthly benefit under subdivision (4) of this section is the total
benefit received by a retired member or beneficiary pursuant to the School
Employees Retirement Act and previous adjustments made pursuant to this section
or any other provision of the act that grants a benefit or cost-of-living
increase, but the total monthly benefit shall not include sums received by
an eligible retired member or eligible beneficiary from federal sources.

(e) Beginning July 1, 2010, the minimum accrual
rate under this subsection was twenty-four dollars and eleven cents. Beginning
July 1, 2011, the minimum accrual rate under this subsection was twenty-five
dollars and nine cents. Beginning July 1, 2012, the minimum accrual rate under
this subsection was twenty-five dollars and forty-nine cents. Beginning July
1, 2013, the board shall annually adjust the minimum accrual rate
to reflect the cumulative percentage change in the Consumer Price Index for
Urban Wage Earners and Clerical Workers from the last adjustment of the minimum
accrual rate;

(5) Each retired member or beneficiary shall receive
the sum of the annual benefit adjustment and such retiree's total monthly
benefit less withholding, which sum shall be the retired member's or beneficiary's
adjusted total monthly benefit. Each retired member or beneficiary shall receive
the adjusted total monthly benefit until the expiration of the annuity option
selected by the member or until the retired member or beneficiary again qualifies
for the annual benefit adjustment, whichever occurs first;

(6) The annual benefit adjustment pursuant to this section
shall not cause a current benefit to be reduced, and a retired member or beneficiary
shall never receive less than the adjusted total monthly benefit until the
annuity option selected by the member expires; and

(7) The board shall adjust the annual benefit adjustment
provided in this section so that the cost-of-living adjustment provided to
the retired member or beneficiary at the time of the annual benefit adjustment
does not exceed the change in the Consumer Price Index for Urban Wage Earners
and Clerical Workers for the period between June 30 of the prior year to June
30 of the present year. If the consumer price index used in this section is
discontinued or replaced, a substitute index published by the United States
Department of Labor shall be selected by the board which shall be a reasonable
representative measurement of the cost-of-living for retired employees.

79-947.07.
Employee who becomes a member on
or after July 1, 2013; annual benefit adjustment; cost-of-living adjustment
calculation method.

On July 1 of each year, for school employees who became
members on or after July 1, 2013:

(1) The board
shall determine the number of retired members or beneficiaries in the retirement
system and an annual benefit adjustment shall be made by the board for each
retired member or beneficiary. The benefit paid to a retired member or beneficiary
under this section shall be increased annually by the lesser of (a) the percentage
change in the Consumer Price Index for Urban Wage Earners and Clerical Workers
for the period between June 30 of the prior year to June 30 of the present
year or (b) one percent;

(2) Each retired member or beneficiary shall receive the sum of
the annual benefit adjustment and such retiree's total monthly benefit less
withholding, which sum shall be the retired member's or beneficiary's adjusted
total monthly benefit. Each retired member or beneficiary shall receive the
adjusted total monthly benefit until the expiration of the annuity option
selected by the member or until the retired member or beneficiary again qualifies
for the annual benefit adjustment, whichever occurs first;

(3) The annual
benefit adjustment pursuant to this section shall not cause a current benefit
to be reduced, and a retired member or beneficiary shall never receive less
than the adjusted total monthly benefit until the annuity option selected
by the member expires; and

(4) The board shall adjust the annual benefit
adjustment provided in this section so that the cost-of-living adjustment
provided to the retired member or beneficiary at the time of the annual benefit
adjustment does not exceed the change in the Consumer Price Index for Urban
Wage Earners and Clerical Workers for the period between June 30 of the prior
year to June 30 of the present year. If the consumer price index used in this
section is discontinued or replaced, a substitute index published by the United
States Department of Labor shall be selected by the board which shall be a
reasonable representative measurement of the cost-of-living for retired employees.

The right of a person to an annuity, an allowance, or any optional benefit under the School Employees Retirement Act, any other right accrued or accruing to any person or persons under such act, the various funds and account created thereby, and all the money, investments, and income thereof shall be exempt from any state, county, municipal, or other local tax, shall not be subject to execution, garnishment, attachment, the operation of bankruptcy or insolvency laws, or any other process of law whatsoever, and shall not be assignable except to the extent that such annuity, allowance, or benefit is subject to a qualified domestic relations order under the Spousal Pension Rights Act.

Cross References

(1) Any person who, knowing it to be false or fraudulent, presents or causes to be presented a false or fraudulent claim or benefit application, any false or fraudulent proof in support of such a claim or benefit, or false or fraudulent information which would affect a future claim or benefit application to be paid under the retirement system for the purpose of defrauding or attempting to defraud the retirement system shall be guilty of a Class II misdemeanor. The retirement board shall deny any benefits that it determines are based on false or fraudulent information and shall have a cause of action against the member to recover any benefits already paid on the basis of such information.

(2) Any school employee, member of a school board or board of education, or agent of any employer, who willfully fails or refuses to furnish to the retirement board upon its request and in the manner prescribed by it such information, data, or records, as may be necessary for carrying into effect the School Employees Retirement Act, shall be guilty of a Class V misdemeanor.

All acts and decisions of the retirement board shall be subject to review, reversal, modification, or approval by the retirement board, on its own motion or on the complaint of a member, under such rules as the retirement board may prescribe. Any teacher or other person, who deems himself or herself aggrieved by any action of the retirement board, may appeal to and have the same reviewed by the retirement board under such rules as the retirement board shall prescribe. Any final order made by the retirement board after review may be appealed, and the appeal shall be in accordance with the Administrative Procedure Act.

Cross References

(1) Any member, disregarding the length of service, may be retired as a result of disability either upon his or her own application or upon the application of his or her employer or any person acting in his or her behalf. Before any member may be so retired, a medical examination shall be made at the expense of the retirement system, which examination shall be conducted by a disinterested physician legally authorized to practice medicine under the laws of the state in which he or she practices, such physician to be selected by the retirement board, and the physician shall certify to the board that the member should be retired because he or she suffers from an inability to engage in any substantially gainful activity by reason of any medically determinable physical or mental impairment which was initially diagnosed or became disabling while the member was an active participant in the plan and which can be expected to result in death or to be of long-continued and indefinite duration. The medical examination may be waived if, in the judgment of the retirement board, extraordinary circumstances exist which preclude substantial gainful activity by the member. Such circumstances shall include hospice placement or similar confinement for a terminal illness or injury. The application for disability retirement shall be made within one year of termination of employment.

(2) The retirement board may adopt and promulgate rules and regulations and prescribe the necessary forms to carry out this section.

Annotations

If the Public Employees Retirement Board's medical examiner opines that the member is not disabled, the member may offer other medical evidence. Shepherd v. Chambers, 281 Neb. 57, 794 N.W.2d 678 (2011).

Upon retirement for disability, a member shall receive a disability retirement allowance which shall consist of a savings annuity and a service annuity computed in the manner specified in section 79-933 or, in lieu thereof, the formula annuity computed in the manner specified in section 79-934 without the reduction to the actuarial equivalent of the formula annuity deferred to the sixty-fifth birthday of the member.

The retirement board may require any disability beneficiary who has not yet attained the age of sixty-five years to undergo a medical examination once each year. Such an examination shall be made (1) at the place of residence of the beneficiary or other place mutually agreed upon, (2) at the expense of the retirement system, and (3) by a physician, legally authorized to practice medicine under the laws of the state in which he or she practices, designated by the retirement board. If any disability beneficiary who has not yet attained the age of sixty-five years willfully refuses to submit to at least one such medical examination in any fiscal year, his or her allowance may be discontinued until his or her withdrawal of such refusal. If such refusal continues for one year, his or her rights in and to his or her disability retirement allowance may be revoked by the retirement board.

If a disability beneficiary under the age of sixty-five years is restored to active service as a school employee or if the examining physician certifies that the person is no longer disabled for service as a school employee, the disability retirement allowance shall cease. If the beneficiary again becomes a school employee, he or she shall become a member of the retirement system. Any prior service certificate, on the basis of which his or her creditable service was computed at the time of his or her retirement for disability, shall be restored to full force and effect upon his or her again becoming a member of such retirement system.

Upon
termination of employment for any cause other than death or retirement, the
retirement board shall, upon the member's demand, terminate his or her membership
in the retirement system and cause to be paid to such member the accumulated
contributions standing to the credit of his or her individual account in the
School Retirement Fund. Any member who attains or has attained membership
in another Nebraska state or school retirement system authorized by the Legislature
and who elects not to be or remain a member of the School Employees Retirement System of the State of
Nebraska shall have his or her accumulated contributions returned to him or
her forthwith.

79-956.
Death of member
before retirement; contributions; how treated; direct transfer to retirement
plan; death while performing qualified military service; additional death
benefit.

(1) If a member dies before his or her retirement date, his or her accumulated
contributions shall be paid to his or her estate, to an alternate payee pursuant
to a qualified domestic relations order as provided in section 42-1107, or
to the person he or she has nominated by designation duly executed and filed
with the retirement board. Except for payment to an alternative payee pursuant
to a qualified domestic relations order, if no legal representative or beneficiary
applies for such accumulated contributions within five years following the
date of the deceased member's death, the contributions shall be distributed
in accordance with the Uniform Disposition of Unclaimed Property Act.

(2) When the deceased member has twenty years or more of
creditable service regardless of age or dies on or after his or her sixty-fifth
birthday and leaves a surviving spouse who has been designated as beneficiary
and who, as of the date of the member's death, is the sole surviving primary
beneficiary, such beneficiary may elect, within twelve months after the death
of the member, to receive (a) a refund of the member's contribution account
balance, including interest, plus an additional one hundred one percent of
the member's contribution account balance, including interest, or (b) an annuity
which shall be equal to the amount that would have accrued to the member had
he or she elected to have the retirement annuity paid as a one-hundred-percent
joint and survivor annuity payable as long as either the member or the member's
spouse should survive and had the member retired (i) on the date of death
if his or her age at death is sixty-five years or more or (ii) at age sixty-five
years if his or her age at death is less than sixty-five years.

(3) When the deceased member who was a school employee on
or after May 1, 2001, has not less than five years of creditable service and
less than twenty years of creditable service and dies before his or her sixty-fifth
birthday and leaves a surviving spouse who has been designated in writing
as beneficiary and who, as of the date of the member's death, is the sole
surviving primary beneficiary, such beneficiary may elect, within twelve months
after the death of the member, to receive (a) a refund of the member's contribution
account balance with interest plus an additional one hundred one percent of
the member's contribution account balance with interest or (b) an annuity
payable monthly for the surviving spouse's lifetime which shall be equal to
the benefit amount that had accrued to the member at the date of the member's
death, commencing when the member would have reached age sixty, or the member's
age at death if greater, reduced by three percent for each year payments commence
before the member would have reached age sixty-five, and adjusted for payment
in the form of a one-hundred-percent joint and survivor annuity.

(4) If the requirements of subsection (2) or (3) of this
section are not met, then the beneficiary or the estate, if the member has
not filed a statement with the board naming a beneficiary, shall be paid a
lump sum equal to all contributions to the fund made by such member plus regular
interest, except that commencing on January 1, 2006, an application for benefits
under subsection (2) or (3) of this section shall be deemed to have been timely
filed if the application is received by the retirement system within twelve
months after the date of the death of the member.

(5) Benefits to which a surviving spouse, beneficiary, or
estate of a member shall be entitled pursuant to this section shall commence
immediately upon the death of such member.

(6) A lump-sum death benefit paid to the member's beneficiary,
other than the member's estate, that is an eligible distribution may be distributed
in the form of a direct transfer to a retirement plan eligible to receive
such transfer under the provisions of the Internal Revenue Code.

(7) For any member whose death occurs on or after January
1, 2007, while performing qualified military service as defined in section
414(u) of the Internal Revenue Code, the member's beneficiary shall be entitled
to any additional death benefit that would have been provided, other than
the accrual of any benefit relating to the period of qualified military service.
The additional death benefit shall be determined as if the member had returned
to employment with the employer and such employment had terminated on the
date of the member's death.

Upon termination of employment for any reason other than death, before qualifying for retirement under section 79-931, the retirement board shall, upon request, issue the member a certified service record and statement of accumulated contributions and retain such member's accumulated contributions. In such event, no further contributions shall be required, regular interest on accumulated contributions shall continue to be credited to his or her account, and none of the member's retirement rights shall be canceled. At age sixty-five or after thirty-five years of creditable service, such member shall become eligible to receive the retirement allowance provided in sections 79-933 and 79-934. Any deferred formula annuity provided shall be based on the member's compensation preceding the date of termination as if the member had retired on his or her date of termination. At the option of the terminating member, and if such member has completed at least five but less than thirty-five years of creditable service, such annuity may commence at any time after such member attains the age of sixty years and before his or her sixty-fifth birthday and shall be reduced by the percentages prescribed in section 79-934. Such election by the terminating member may be made at any time prior to the commencement of the annuity payments.

(1) Beginning on September 1, 2012, for the purpose of providing the funds to pay for formula annuities, every employee shall be required to deposit in the School Retirement Fund nine and seventy-eight hundredths percent of compensation. Such deposits shall be transmitted at the same time and in the same manner as required employer contributions.

(2) For the purpose of providing the funds to pay for formula annuities, every employer shall be required to deposit in the School Retirement Fund one hundred one percent of the required contributions of the school employees of each employer. Such deposits shall be transmitted to the retirement board at the same time and in the same manner as such required employee contributions.

(3) The employer shall pick up the member contributions required by this section for all compensation paid on or after January 1, 1986, and the contributions so picked up shall be treated as employer contributions pursuant to section 414(h)(2) of the Internal Revenue Code in determining federal tax treatment under the code and shall not be included as gross income of the member until such time as they are distributed or made available. The contributions, although designated as member contributions, shall be paid by the employer in lieu of member contributions. The employer shall pay these member contributions from the same source of funds which is used in paying earnings to the member. The employer shall pick up these contributions by a compensation deduction through a reduction in the cash compensation of the member. Member contributions picked up shall be treated for all purposes of the School Employees Retirement Act in the same manner and to the same extent as member contributions made prior to the date picked up.

(4) The employer shall pick up the member contributions made through irrevocable payroll deduction authorizations pursuant to sections 79-921 and 79-933.03 to 79-933.06, and the contributions so picked up shall be treated as employer contributions in the same manner as contributions picked up under subsection (3) of this section.

Every employer shall deduct and withhold an amount pursuant to section 79-958 from the compensation as a school employee of each member on each payroll period after such school employee becomes a member of the retirement system. The employer shall transmit periodically, as directed by the retirement board and in such form as is approved by the retirement board, such amounts and any other information required by the board. The board shall immediately transmit to the State Treasurer all payments received. The board may charge the employer a late administrative processing fee not to exceed twenty-five dollars if the information and money required by section 79-958 are delinquent or are not timely received by the board. In addition, the board may charge the employer a late fee of thirty-eight thousandths of one percent of the amount required to be submitted pursuant to this section for each day such amount has not been received. The late fee may be used to make a member's account whole for any costs that may have been incurred by the member due to the late receipt of contributions. The board shall charge the employer an amount equal to the interest which would have accrued if the delinquent report causes the employee to lose interest on his or her account. The proceeds of the interest charge shall be used to reimburse the account of each school employee deprived of interest by the delay.

Every contract of employment with a school employee shall
specify (1) the contractual
period of employment, including the starting and ending dates of the contract,
and (2) that it is subject to the provisions of the School Employees
Retirement Act.

Every employer and school employee shall send to the director of the Nebraska Public Employees Retirement Systems, as specified in section 79-906, upon request and in the manner required by the director, such information as he or she may require (1) for the identification of school employees and (2) for the determination of the membership of the retirement system and the obligations of the employer and school employee to the retirement system.

Every employer shall pay to the retirement board the required deposits made by every member in the service of such employer. No employer shall, without the consent of the member, withhold or deduct from any member's compensation on any payroll any amount in excess of the required deduction for the period covered by such payroll.

79-965.
Payment of compensation less required deductions; discharge of claims for service.

Notwithstanding any other law, rule, or regulation affecting the salary, pay, compensation, or tenure of any member, payment of such salary, pay, or compensation to such member, less the required deductions provided for in the School Employees Retirement Act, shall be a full and complete discharge and acquittance of all claims for service rendered by such member during the period covered by such payment.

(1)(a) On the basis of all data in the possession of the retirement board, including such mortality and other tables as are recommended by the actuary engaged by the retirement board and adopted by the retirement board, the retirement board shall annually, on or before July 1, determine the state deposit to be made by the state in the School Retirement Fund for that fiscal year. The amount of such state deposit shall be determined pursuant to section 79-966.01. The retirement board shall thereupon certify the amount of such state deposit, and on the warrant of the Director of Administrative Services, the State Treasurer shall, as of July 1 of such year, transfer from funds appropriated by the state for that purpose to the School Retirement Fund the amount of such state deposit.

(b) Beginning July 1, 2016, the contingent state deposit described in this subsection shall be calculated as a percent of compensation of all members of the retirement system. For any year in which a deposit is made to the School Retirement Fund under this subsection, if the actuary for a retirement system provided for under the Class V School Employees Retirement Act determines that the actuarially required contribution rate, for the fiscal year of the retirement system that begins before the state deposit, exceeds the rate of all contributions required pursuant to the Class V School Employees Retirement Act, using the thirty-year amortization period specified in section 79-966.01, the Class V district school board may request a public hearing of the Appropriations Committee of the Legislature to ask the state to transfer to the funds of the retirement system provided for under the Class V School Employees Retirement Act an amount determined by multiplying the compensation of all members of such retirement system by the lesser of the percent of compensation deposited into the School Retirement Fund under this subsection or the percent of compensation of the members of the retirement system provided for under the Class V School Employees Retirement Act needed to meet the actuarially required contribution rate for such system, using the thirty-year amortization period specified in section 79-966.01. Any additional amount of transfer so calculated, recommended by the Appropriations Committee of the Legislature and approved by the Legislature, shall be added to the two percent specified in subsection (2) of this section for the amount required by subsection (2) of section 79-916 to be transferred to the funds of the retirement system provided for under the Class V School Employees Retirement Act.

(2) For each fiscal year beginning July 1, 2014, in addition to the state deposits required by subsections (1) and (3) of this section, the state shall deposit in the School Retirement Fund an amount equal to two percent of the compensation of all members of the retirement system.

(3) In addition to the state deposits required by subsections (1) and (2) of this section, beginning on July 1, 2005, and each fiscal year thereafter for employees who become members prior to July 1, 2016, the state shall deposit in the Service Annuity Fund such amounts as may be necessary to pay the normal cost and amortize the unfunded actuarial accrued liability of the service annuity benefit established pursuant to sections 79-933 and 79-952 as accrued through the end of the previous fiscal year of the school employees who are members of the retirement system established pursuant to the Class V School Employees Retirement Act.

Cross References

Class V School Employees Retirement Act, see section 79-978.01.

79-966.01.
School Retirement
Fund; annual actuarial valuations.

Beginning July
1, 2013, and each year thereafter,
this section shall govern annual actuarial valuations of the School Retirement
Fund. In order to determine the additional required deposits by the State
of Nebraska, as required by section 79-966, the board shall cause an annual
actuarial valuation to be performed that will value the plan assets for the
year and ascertain the contributions required for such fiscal year. The actuary
for the board shall perform the annual valuation using the entry age actuarial
cost method. Under this method, the actuarially required funding rate is equal
to the normal cost rate, plus the contribution rate necessary to amortize
the unfunded actuarial accrued liability on a level percentage
of salary basis. The normal cost under this method shall be determined
for each individual member on a level percentage of salary basis. The normal
cost amount is then summed for all members. Beginning July 1, 2006, any existing
unfunded liabilities shall be reinitialized and amortized over a thirty-year
period, and during each subsequent actuarial valuation, changes in the funded
actuarial accrued liability due to changes in benefits, actuarial assumptions,
the asset valuation method, or actuarial gains or losses shall be measured
and amortized over a thirty-year period beginning on the valuation date of
such change. If the unfunded actuarial accrued liability under the entry age
actuarial cost method is zero or less than zero on an actuarial valuation
date, then all prior unfunded actuarial accrued liabilities shall be considered
fully funded and the unfunded actuarial accrued liability shall be reinitialized
and amortized over a thirty-year period as of the actuarial valuation date.
If the actuarially required contribution rate exceeds the rate of all contributions
required pursuant to the School Employees Retirement Act, the actuary shall
determine the added contributions required to be paid by the State of Nebraska
that constitute the difference between the actuarially required contribution
rate and the rate of all other required contributions.

As often as may be necessary, the retirement board shall cause to be made a thorough investigation of the several funds or account of the retirement system for the purpose of determining the rates at which the benefits will be granted. It shall make adjustments in such rates as, upon recommendation of the actuary, may appear to be proper for maintaining solvency of the several funds or account. No revision of rates shall affect adversely the rights of any beneficiary under an application made prior to such revision. The retirement board shall, from time to time, order and make such distribution of gains and savings to the several funds or account as it may deem equitable.

All assets of the retirement system shall be credited, according to the purpose for which they are held, to the Expense Fund, to the School Retirement Fund, or to the Contingent Account. Any money in the account or funds available for investment shall be invested by the state investment officer pursuant to the Nebraska Capital Expansion Act and the Nebraska State Funds Investment Act.

The Nebraska Public Employees Retirement Systems shall keep an accounting of the required deposits from the compensation of members collected to provide savings annuities. The accumulated contributions, plus statutorily required accumulated interest, of a member may be returned to him or her upon his or her termination, paid to his or her estate or designated beneficiary in the event of his or her death as provided in section 79-956, or used in the event of his or her retirement to assist in funding his or her school retirement allowance, disability retirement allowance, or formula annuity allowance. Any accumulated contributions forfeited shall be transferred from the School Retirement Fund to the Contingent Account.

The School Retirement Fund is created. The required deposits of the employer, the state, and the employees shall be credited to the fund and all savings annuities, service annuities, and formula annuities shall be paid from the fund as provided in the School Employees Retirement Act. Any unexpended balance existing on June 30, 2002, in the School Employers Deposit Account, the Service Annuity Account, the School Employees Savings Account, the Annuity Reserve Account, and the School Employees Retirement System Reserve Fund shall be transferred to the School Retirement Fund.

Source:Laws 2002, LB 407, § 42.

79-973.
Contingent Account; created; use.

A Contingent Account is created (1) to facilitate the crediting of regular interest on the amounts in the School Retirement Fund, (2) to fund the adjusted supplemental retirement benefit provided by section 79-947, and (3) to provide an account to cover any special requirements of the School Retirement Fund or the Expense Fund. All income, interest, and dividends derived from the deposits and investments authorized by the School Employees Retirement Act shall be paid into the Contingent Account. The retirement board may accept gifts, devises, and bequests. Any funds which may come into the possession of the retirement system in this manner or which may be transferred from the School Retirement Fund by reason of the lack of a claimant or because of a surplus in any fund or account described in section 79-968, or any other money the disposition of which is not otherwise provided for in the act, shall be credited to the Contingent Account. Any deficit occurring in the School Retirement Fund or in the Expense Fund shall be met by payments to the fund from the Contingent Account. Annually the retirement board shall estimate the amount of money deemed necessary to pay the obligation levied against the Contingent Account, including regular interest. If such amount exceeds the revenue estimated to accrue to the fund for that year, such excess shall be certified to the State Treasurer and shall, on warrant of the Director of Administrative Services, be transferred from funds appropriated by the state for such purpose to the Contingent Account.

The Expense Fund is created and is the fund to which shall be credited the proportionate share of administration expense transferred from the Contingent Account at the direction of the retirement board. The Expense Fund shall be credited with money from the retirement system assets and income sufficient to pay the pro rata share of administrative expenses incurred as directed by the board for the proper administration of the School Employees Retirement Act and necessary in connection with the administration and operation of the retirement system. Annually, as soon after July 1 as is practicable, the retirement board shall estimate the amount of money which is deemed necessary to be paid into the Expense Fund for that fiscal year.

Any funds of the retirement
system available for investment shall be invested by the Nebraska Investment
Council pursuant to the Nebraska Capital Expansion Act and the Nebraska State
Funds Investment Act. Payment for investment services by the council shall
be charged directly against the gross investment returns of the funds. Charges
so incurred shall not be a part of the retirement board's annual budget request.
The amounts of payment for such services, as of December 31 of each year,
shall be reported not later than March 31 of the following year to the council,
the retirement board, and the Nebraska Retirement Systems Committee of the
Legislature. The report submitted
to the committee shall be submitted electronically. All money
received by the State Treasurer and the retirement board for the retirement
system shall be invested by the state investment officer within thirty-one
days after receipt.

Cross References

Nebraska Capital Expansion Act, see section 72-1269.

Nebraska State Funds Investment Act, see section 72-1260.

79-977.
School district expenditures; not exempt from limitations on spending.

Any expenditure made by a school district pursuant to sections 79-934, 79-968, and 79-973 as changed by Laws 1993, LB 292, shall be considered a general fund expenditure of the district and shall not be exempt from the growth limitations placed on district spending by the Tax Equity and Educational Opportunities Support Act.

Cross References

Tax Equity and Educational Opportunities Support Act, see section 79-1001.

79-977.01.
Limitation of actions.

Every claim and demand under the School Employees Retirement Act and against the retirement system or the retirement board shall be forever barred unless the action is brought within two years of the time at which the claim accrued.

Source:Laws 1996, LB 1076, § 31.

79-977.02.
Retirement system contributions, income, property, and rights; how treated.

All contributions to the retirement system, all property and rights purchased with the contributions, and all investment income attributable to the contributions, property, or rights shall be held in trust by the State of Nebraska for the exclusive benefit of members and their beneficiaries and shall only be used to pay benefits to such persons and to pay administrative expenses according to the provisions of the School Employees Retirement Act.

Source:Laws 1998, LB 1191, § 59.

79-977.03.
Termination of system or contributions; effect.

Upon termination or partial termination of the retirement system or upon complete discontinuance of contributions under the retirement system, the rights of all affected members to benefits accrued to the date of such termination, partial termination, or discontinuance, to the extent funded as of such date, shall be nonforfeitable.